The US has barred companies from France, Germany, Russia, Canada and other nations that refused to join the US-led coalition in Iraq from competing for billions of dollars in prime contracts to rebuild the country, a Pentagon memorandum made public Tuesday said.
Germany called the decision "unacceptable."
Deputy Defense Secretary Paul Wolfowitz, in a decision dated Dec. 5, cited "essential security interests" of the US and the need to encourage countries to provide troops for Iraq as the reason for limiting competition for US$18.6 billion in prime contracts.
They range from equipping the new Iraqi army to rebuilding and refurbishing power and water plants, roads, oil installations and communications systems.
Its decision, which was posted on a Pentagon Web site, lists 63 countries that are eligible to compete for some 26 prime contracts that cover the sweep of Iraq's reconstruction needs.
Conspicuously absent from the list are the countries that opposed the war and have declined to send troops to join in the post-war occupation of Iraq, including France, Germany, Russia and Canada.
"It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, coalition partners and force contributing nations," the Wolfowitz finding said.
"Thus it is clearly in the public interest to limit prime contracts to companies from these countries," it said.
The document said "every effort must be made to expand international cooperation in Iraq."
It noted that since the end of major combat operations, the number of coalition troops from countries other than the US has increased from 14,000 to 23,7000, allowing the number of US troops to drop by 12,000.
"Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts," it said.
German government spokesman Bela Anda said that if the reports were true, "it would be unacceptable."
"It would not correspond either to the spirit of what we had agreed together, which is about looking together toward the future and not the past," he told a regular government news conference.
Russia and France said they were still studying the decision.
Funding for the contracts comes from the US$18.6 billion approved by Congress last month in supplemental spending to underwrite a massive reconstruction program in Iraq.
Companies barred from competing as prime contractors will still be able to work as sub-contractors on the Iraqi projects, said Major Joe Yoswa, a Pentagon spokesman.
But Wolfowitz's decision indicates that Washington intends to turn up the pressure on countries that oppose its Iraq policy by making their influential business sectors pay a price.
That could further poison relations with Germany and France, erstwhile allies that the Pentagon portrayed during the war as isolated representatives of "old Europe."
US efforts to raise troops and international funding for Iraq have so far fallen short of Washington's expectations.
The EU pledged US$1.3 billion for Iraq's reconstruction, but France and Germany have withheld individual contributions.
The Pentagon for its part failed to find troops to fill a third multinational division in time for deployment early next year, forcing the redeployment of a Marine division that recently returned from Iraq.
The army, meanwhile, has warned that returning divisions will be at a low state of readiness for up to six months, leaving only two combat ready divisions available as reinforcements in the event of a second war in Korea or elsewhere.
General Richard Myers, the chairman of the Joint Chiefs of Staff, declared flatly Tuesday that the US military can meet any contingency.
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